TALKING MONEY WITH: LIZ SMITH; The Scoop? Gossip Maven Starts Saving

THE singer Sophie Tucker once offered this advice: From birth to age 18, a girl needs good parents; from 18 to 35, good looks; from 35 to 55, a good personality, and from 55 on, cash.

Almost a decade ago, at age 65, Liz Smith, the queen of gossip columnists, was hopelessly out of sync with Ms. Tucker's agenda. ''I had about $25,000 saved, and that was it,'' Ms. Smith recalled cheerfully during a recent interview.

Certainly, Ms. Smith, the woman who broke the news of Donald Trump's divorce from his first wife, Ivana, and attended Elizabeth Taylor's most recent wedding, had rubbed shoulders with some of the savviest financial minds in America, from Henry Kravis to Alan Greenspan to Ace Greenberg. But she had never been a saver. From the year she graduated from college, she had worked obsessively. But her goal was always to be somebody, not necessarily somebody rich.

Even after she became a celebrity, with her name plastered across her daily column, she refused to worry about the future. She lived high, spent lavishly and figured she could always work and earn more. ''Money was such an evil to me in my early life that I didn't pay any attention to it,'' Ms. Smith said in the drawl of her native Fort Worth. ''Even before I had money, I thought it was something to throw off the back of trains.'' Having watched her father's gambling wreak havoc on her family and her mother's emotions, ''I had learned that it didn't do any good to try to hold onto money,'' she continued during an interview at her simply furnished apartment in a midtown Manhattan high-rise.

Then, about five years ago, Ms. Smith met Peter G. Peterson and his wife, Joan Ganz Cooney. Mr. Peterson, a former Secretary of Commerce, was by then chairman of the hugely successful Blackstone Group, a buyout firm. Ms. Cooney was a founder of the Children's Television Workshop. After Ms. Smith got to know Mr. Peterson and Ms. Cooney, they had a discussion about her finances. ''They said, 'What do you mean you don't have $5 million in the bank?' '' Ms. Smith recalled. ''Pete couldn't believe I was so stupid. He couldn't believe I wasn't worth millions.''

Though Ms. Smith declines to disclose her salary, people close to her estimate that she makes $1 million a year -- about $900,000 from her column, which appears six times a week in Newsday and The New York Post and is syndicated to more than 60 newspapers nationwide, and about $100,000 from articles for Good Housekeeping magazine and appearances on WNYW-TV, Channel 5 in New York, and on E! Entertainment, the cable channel. In addition, her agent recently negotiated a $1 million advance from Hyperion Books for her memoirs.

Ms. Smith confesses that spending is her financial strong suit. Not only does she support her brother -- as she supported her mother until her death -- she also has a weakness for gourmet restaurants, where she likes to leave big tips. And, she acknowledges, she counted on her popular column to provide her with a steady income for many years. Twice divorced, with no children, she said she ''just didn't pay enough attention.''

''I was the world's oldest adolescent, emotionally and practically,'' she said.

THE gave her first thought to saving money about six years ago, prompted by her increasingly large salary, and got serious about it only with what she fondly called nagging by Mr. Peterson and her assistant, Diane Judge.

Mr. Peterson confirmed that he was shocked by the paucity of her savings. His response was to tell her: ''As John Maynard Keynes once said, 'Some people have a propensity to consume,' and you certainly are a gifted consumer.' ''

He realized that immediate action was necessary. So he sat down with her and worked out a nuts-and-bolts savings plan. The most important issue was disability insurance, ''to cover the downside,'' as Mr. Peterson put it. And because his friend ''essentially runs a small business, we got into the most efficient way of creating a tax-deferred pension arrangement'' with a tax-deferred retirement account and other tax shelters, he said. ''Once we found the right format, and it was tax deferred, we switched her from tax-free municipal bonds into higher-yield fixed-income instruments,'' he said.

Because of Ms. Smith's age, Mr. Peterson did not recommend stocks despite the higher returns that they have generated over time. ''If you are 72 and you are counting on this for a good standard of living later in life, it is probably prudent to give up some of the upside to get the downside well covered,'' he said. ''The stock market is good over the long term, but remember, between 1967 and 1982 it went nowhere.''

Mr. Peterson says people should calculate their retirement needs and begin saving early. Ms. Smith had done neither, so he proposed an aggressive plan: Set aside $200,000 to $300,000 a year. She has managed to do so, she said, by directing Ms. Judge, her assistant, to regularly set money aside -- and to hound her about the size of her American Express bills. By now, that presumably means Ms. Smith has socked away more than $2 million.

Still, Ms. Smith says she will never be super-rich. ''Pete has some investments now where you have to have $5 million or you can't get into it,'' she said. ''I asked him the other day, 'When can I get into this thing?' and he said, 'Never. You'll never have enough money.' ''

Mr. Peterson's role went beyond simply suggesting a financial strategy. He went along with her when she negotiated with Newsday in 1995 and helped her win a contract that reportedly runs seven years in addition to permission to run her column in The New York Post.

The contract with The Post is worth $100,000 a year to Ms. Smith, but its value transcends money, Mr. Peterson said, because it gives her a journalistic pipeline to the cultural -- and gossip -- capital of the United States. ''I wanted her to have the psychic income of having a column in New York,'' he said.

For all of Ms. Smith's recent efforts to prepare for retirement, she just cannot get all that excited about her finances. From time to time, she glances at the monthly statements of her accounts at the Offit Bank, which specializes in money management for individual clients.

She does have a stock portfolio -- but it came about by chance. Some years ago, she said, she inherited some ''really great stocks, like Coca-Cola,'' worth $20,000, from a friend, and the value of that cache has quintupled. But even if the stocks had not gone up, it is unlikely she would have sold them. ''I have kept them for sentimental reasons,'' she said. She said she thought Offit Bank might have bought her a few mutual funds, but she was not certain.

GIVEN the hard times she knew as a child in Fort Worth, it is perhaps not surprising that she became a free-spender as an adult. Though her father was a successful cotton salesman for a time, he was taken off salary and put on commission during the Depression -- and his income slowed to a trickle. To make things worse, he was addicted to the race track, poker and craps.

As a result, she remembers, her parents had to sell their house and move into a smaller one. They paid the local government extra to keep her in her old school -- but she is not sure whether that was good. ''I grew up with all these little rich kids,'' she said. ''I didn't have a dime. They talked about their allowances.'' She never pretended to have more than she did, she added, primarily because she thought that her classmates would see through her and that she would gain stature by owning up to her reduced circumstances. ''I knew it wouldn't do any good,'' she said. ''I couldn't face that. I was always a horrible little social climber in my way.''

Every Christmas, her father delivered his children a cryptic message that reflected his own tortured relationship with money. He gave each of them silver dollars -- a fortune for a child in the Depression -- but then asked them to do the almost impossible. ''He would say we should save them, and of course, we were dying to spend them,'' Ms. Smith said. ''At the same time, we thought it was not right to spend them.''

In effect, her father was asking his offspring to show a restraint toward money that he was unable to muster. ''It gave us an emotional economic crisis early on,'' Ms. Smith said.

Even after her father got a new job, the family fortunes did not improve much because he couldn't hold onto his money. ''He never stopped jumping around enough to feel bad about anything,'' she said. ''He was a real iconoclast. He had a mind like a computer. He would get a whole lot of money, and the next thing you knew, he was in a crap game.''

Ms. Smith recalled his coming home late one night after playing craps, dropping into a chair and commanding, '' 'Help me take my boots off.''

She said he ''had money stuffed down in his Lucchese boots, and it poured out all over the floor -- it was really dramatic.''

Like most gamblers, though, her father lost more than he won -- and his habit created dissension in the family. ''It drove my mother crazy,'' Ms. Smith said. Once, her mother returned crying to the house from a walk to the mailbox. ''I just can't stand it,'' she remembers her mother saying. ''The Baptist Standard and The Racing Form in the same mailbox.''

Another time, when she was a college student, her father reclaimed a gift to pay off a gambling debt. He had bought her a maroon Plymouth for her to drive around the University of Texas -- then showed up one day and asked for the keys. ''He said, 'I'm sorry. I have to get rid of your car,' '' she recalled. ''He had lost the car in a crap game or something. I was heartbroken.''

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Her father's compulsive behavior had some benefits. He paid her college tuition by winning $1,500 on a horse named Soap Stix, she said.

After earning a bachelor's degree in journalism and nearly getting a master's degree in English, Ms. Smith came to New York in 1949.

She had spent her teen-age years lying on the floor of her bedroom reading Walter Winchell, the most powerful social and political commentator of the 1940's and 50's, whose column appeared in more than 2,000 newspapers and whose voice was instantly recognizable to anyone who ever turned on a radio. ''I was dying to go to New York and see the Stork Club,'' the world's most famous nightclub in those days and a Winchell hangout, she said.

She was also dying to be a journalist when she arrived with $50 in her pocket. For three months she searched for a magazine job. Finally she called the actor Zachary Scott, whom she had known at college. He sent her to see Chuck Saxon, the editor of Modern Screen. ''He said 'You have the most virile writing style,' '' Ms. Smith said. ''I said, 'Thank you,' and hung up. Then I looked up the word 'virile.' ''

After that, she worked her way up from freelance magazine writing, eventually going to work for Igor Cassini, the famous society gossip columnist who wrote under the name Cholly Knickerbocker. For the next two decades, she worked for media celebrities, from Mr. Cassini and Allen Funt, host of the TV show ''Candid Camera,'' to Mike Wallace, the CBS newsman, to Helen Gurley Brown, then Cosmopolitan editor and her only boss who was a woman.

Though Ms. Smith envied friends in more mainstream journalistic enterprises, such jobs were hard to get, particularly for women who had not attended Vassar or Wellesley, she said. ''I was probably saved from a life of intense nothingness by the fact that I couldn't get a really respectable job,'' she said.

Like many women in the male-dominated workplaces of those days, Ms. Smith kept in the background. And she never dreamed of demanding a raise. ''This was pre-women's lib,'' she said. ''And I thought I was a second-rate person. I was always a first-rate guy's first-rate girl.'' Even though she was probably one of the best-paid women freelancers around, she said: ''I didn't value myself. I was like Rodney Dangerfield. I didn't get any respect.''

But with psychotherapy, her attitude began to change. Her psychologist, Mildred Newman, asked her, '' 'Why do you think you don't deserve to be a success?' '' Therapy did not necessarily make her a better negotiator, she said, but ''it helped me get out of my own way. I began to realize I didn't just want to be a journeyman journalist. I wanted more.''

It was not until 1978, when The Daily News gave her a column and it became an immediate hit, that she felt she had truly arrived. A year later, when The Daily News was shut down by a strike, her bosses encouraged her to go on WNBC-TV's ''Live at Five'' newscast to keep her name before the public.

As her salary rose, ''I felt I was rich because I could take cabs and not worry about the prices on the menu,'' she said. By the late 1980's, she was making about $350,000 a year from her Daily News salary, syndication fees for the column and payments for her WNBC appearances.

Still, it never occurred to her to save a penny of it. ''I just thought supporting myself and living in New York was great,'' she recalled. ''I lived like a fool and spent everything I ever made.''

As Ms. Smith looks back, she realizes that her blase attitude toward money mirrored her father's so closely that it must have been a form of subconscious imitation. ''I was just as much of a gambler'' as he was, she said. ''I kept blindly forging ahead like a mole, without thinking too much about the future. I guess I always thought I would hit it where I wouldn't have to worry. I felt like one day I would write something. I felt like I had the capacity to make money.''

THOUGH her job increasingly took her into contact with the super-rich, she said she never resented them for their wealth. ''I have been passionately jealous in emotional ways, but I have never been envious of anybody,'' she said. Sure, she said, she would like to have enough money to quit her job tomorrow and still have $500,000 a year to live on. But that will never happen, she said, and she does not really mind. ''I've had a great life,'' she said.

Nor has she ever counted on her well-heeled friends to bail her out of tight spots. ''It may be nice to have rich friends, but they'll never give you any money,'' she said. ''That is the fallacy.'' Still, she said: ''You might live well from knowing them. And they might give you money for charity.'' (Ms. Smith is an avid fund-raiser for Literacy Partners.)

Only once, after she lost her job when Mr. Cassini gave up his column in 1963, did she borrow money -- $1,500, from the real-estate heir and man-about-town Jerry Zipkin, who had asked whether he could help. She paid back every penny, she said.

Indeed, she dislikes owing money. Her agent, Joni Evans, remembered how Ms. Smith insisted on returning an advance from Simon & Schuster for a book she never got around to writing.

But if she never asks for money from friends, she listens to their advice -- as was seen when Mr. Peterson help her negotiate with Newsday. Ms. Smith had left The Daily News in 1991 and joined New York Newsday, the Long Island newspaper's New York edition. When it folded in 1995, Long Island Newsday wanted to renegotiate the contract. ''They had my life in their thrall,'' Ms. Smith said. ''They could have ruined my life very easily. But Pete sat there and said: 'I don't know if you gentlemen have noticed, but you treat Liz like she is this glamorous young girl, but she is no spring chicken.' And he added, 'She has never saved any money. So I want you to do right by her.' ''

As part of the new contract, Newsday agreed to let her column appear in The New York Post, which pays $200,000 a year for it, divided evenly between Ms. Smith and Newsday. Newsday also keeps the $150,000 or more in syndication revenue that the columns earn.

Today, despite her new-found penchant for saving, Ms. Smith still spends considerably. She pays a staff of three out of her own pocket. And she continues to indulge her culinary lust. ''I eat out at incredible restaurants, and I pick up checks like crazy.''

Moreover, she continues to support her brother, who lives in the home she bought for her late mother. And like her father, who loved to give money away after he won it, Ms. Smith sometimes helps out friends. She gave Ms. Judge the money to make a down payment on a country house, for example.

RECENTLY, moreover, her late-blooming financial maturity has nudged her into a more expensive life style. In keeping with what she calls her adolescent outlook, she used to live a bit as a recent college graduate would, working out of an office in her Manhattan apartment. She now rents a second apartment for herself and uses her old one solely for business. And, not long ago, she bought a Mercedes.

With the exception of an occasional gift from the designer Arnold Scassi, a close friend, she added, she buys all her own clothes. So far, she jokes, she has not accepted any bribes to supplement her income. ''I suppose I have my price,'' she said, ''but I don't think I have heard it yet.''

Still, saving money has become easier. Ms. Judge said that one benefit of moving to Newsday in 1991 was that Ms. Smith's salary was paid electronically. ''That way,'' Ms. Judge said, ''she is not as tempted to spend it. It goes directly into a checking account. When the account gets high, I move some of it to a money-market fund.''

Clearly, Ms. Smith has heard her friends' words of warning. And it would seem she has adopted the credo of Sophie Tucker: ''I've been rich, and I've been poor, and rich is better.''